Technology Transfer at the University of Colorado Health Sciences Center

1. April 16, 2004 Technology Transfer at the University of Colorado Health Sciences Center

2. April 16, 2004 Our Mission …aggressively pursue, protect, package, and license to business the intellectual property generated from the research enterprise and to serve faculty, staff, and students seeking to create such intellectual property. Our faculty call us the patent office but that is not all we do. Our mission is orientted to serve all University StakeholdersOur faculty call us the patent office but that is not all we do. Our mission is orientted to serve all University Stakeholders

3. April 16, 2004 The University Faculty VPAAR, President, and Regents Students The Community Our partners Industries we partner with The business community at large Who are we accountable to? Internal and external stakeholders Our faculty relationship are a very important component of our mission. They are the foundation of our success and ultimately determine the quality of the product we deliver to the marketplace. We are funded, in part, by President Hoffman’s discretionary initiatives. Students play a key role in market research and diligence and we feel our process delivers important tech business skills to industry. CTCP is a multifaceted initiative to develop technologies and the students are a focal point of the initiative. We call on industry experts, attorneys, investors, students, and licensing associate to work with us on cases. CTCP serves all of our stakeholder’s interests. Our obligations to our partners are critical- they invest in our technologies and we strive to find ways to find synergy and structure the relationships that ultimately make TTO tick. Opening our pipeline to the broader business community is an important objective of TTO. We strive to devise processes and mechnisms to do this systematically. Who are we accountable to? Internal and external stakeholders Our faculty relationship are a very important component of our mission. They are the foundation of our success and ultimately determine the quality of the product we deliver to the marketplace. We are funded, in part, by President Hoffman’s discretionary initiatives. Students play a key role in market research and diligence and we feel our process delivers important tech business skills to industry. CTCP is a multifaceted initiative to develop technologies and the students are a focal point of the initiative. We call on industry experts, attorneys, investors, students, and licensing associate to work with us on cases. CTCP serves all of our stakeholder’s interests. Our obligations to our partners are critical- they invest in our technologies and we strive to find ways to find synergy and structure the relationships that ultimately make TTO tick. Opening our pipeline to the broader business community is an important objective of TTO. We strive to devise processes and mechnisms to do this systematically.

4. April 16, 2004 Functions Faculty Service Commercial partnerships and contracts Revenue Center for the University Licensing royalties and research revenues Augment Impact of Research Mission Commercial development of tangible/intellectual output Economic Development Startups and jobs Our primary service objective is to our faculty and their technology. They have interests and objectives that we must ultimately support when seeking synergy and a foundation for a deal Our role as a revenue center is important but balanced by factors of the Academic mission. Part of President Hoffman’s mandate is a robust technology transfer operation whose financial success id a by product of the broader internal mission coupled with commercial synergies Economic develop is not a direct mandate of the institution per se, but our fulfillment of the spirit of the Bayh-Dole Act of 1980 speaks to this objective. BD gave University right to take title to proprietary assets that require commercial investment to fully realize the full potential of University inventions.Our primary service objective is to our faculty and their technology. They have interests and objectives that we must ultimately support when seeking synergy and a foundation for a deal Our role as a revenue center is important but balanced by factors of the Academic mission. Part of President Hoffman’s mandate is a robust technology transfer operation whose financial success id a by product of the broader internal mission coupled with commercial synergies Economic develop is not a direct mandate of the institution per se, but our fulfillment of the spirit of the Bayh-Dole Act of 1980 speaks to this objective. BD gave University right to take title to proprietary assets that require commercial investment to fully realize the full potential of University inventions.

5. April 16, 2004 Faculty involvement in the commercialization process Create long-term value through commercial investment and technology adoption Transactions reflect upside for the University Recover patent costs and reinvest in our faculty Adopt and implement “best practices” for licensing Empowerment of a skilled and experienced professional staff Responsiveness to industry needs and requests Our budget and fiscal demands require a significant participation of the “fruits of our labors”. The balance is delicate, the interests sometime in opposition, so our deals and our efforts must reflect and incentive and reward for all who invest and participate in the process. The deal has to reflect fair terms, aligned interest, and upside.Our budget and fiscal demands require a significant participation of the “fruits of our labors”. The balance is delicate, the interests sometime in opposition, so our deals and our efforts must reflect and incentive and reward for all who invest and participate in the process. The deal has to reflect fair terms, aligned interest, and upside.

6. April 16, 2004 Service capabilities For Faculty… Management of intellectual resources Foster industry partnerships License and commercialize technology Educational programs in concert with business community Assistance in networking, raising capital, establishing management Again, we deal primarily in intellectual property but recognize commercial participation is the foundation of valuing intellectual property rights. That requires legal protection, investment, management, development, and collaboration. Our expertise includes a multi faceted approach to managing all of these factors. IP management is done in concert with external counsel (patent attorneys). Partnerships are primarily the result of networking, from our office and from faculty relationship. 70% of pure licensing deals are conference/faculty initiated. Faculty education and awareness are a key to identifying our assets and managing them. We work with attorneys, inventors, entrepreneurs, and investors to calibrate expectations and create awareness of important commercial issues. When we have a startup opportunity and an entrepreneurial inventor, we work to facilitate the connections, perspective, and expectations necessary to carry a discovery forward into a true business opportunity.Again, we deal primarily in intellectual property but recognize commercial participation is the foundation of valuing intellectual property rights. That requires legal protection, investment, management, development, and collaboration. Our expertise includes a multi faceted approach to managing all of these factors. IP management is done in concert with external counsel (patent attorneys). Partnerships are primarily the result of networking, from our office and from faculty relationship. 70% of pure licensing deals are conference/faculty initiated. Faculty education and awareness are a key to identifying our assets and managing them. We work with attorneys, inventors, entrepreneurs, and investors to calibrate expectations and create awareness of important commercial issues. When we have a startup opportunity and an entrepreneurial inventor, we work to facilitate the connections, perspective, and expectations necessary to carry a discovery forward into a true business opportunity.

7. April 16, 2004 Service capabilities For the business community… Industry has different motivation that academia. Our job is to find synergies in those motives and codify them in formalized agreements. Ideally those agreements culminate in licensing agreements and product that expand the reach and utilization of University innovations. Sometimes we bring our resources to bear on technologies we feel represent clear startup or product opportunities. We feel representation of the key diligence issues and information in this vein creates value for potential investors and managers that can get us through the gap in marginal opportunities. Our goal is to isolate and eliminate as many risks for the investor as reasonably possibleIndustry has different motivation that academia. Our job is to find synergies in those motives and codify them in formalized agreements. Ideally those agreements culminate in licensing agreements and product that expand the reach and utilization of University innovations. Sometimes we bring our resources to bear on technologies we feel represent clear startup or product opportunities. We feel representation of the key diligence issues and information in this vein creates value for potential investors and managers that can get us through the gap in marginal opportunities. Our goal is to isolate and eliminate as many risks for the investor as reasonably possible

8. April 16, 2004 Benchmarks $300 M in federal funding in FY 2000 CU ranks #4 among all public institutions and #8 among all institutions in federal R&D funding CU Health Sciences Center ranked 5th among all public U.S. medical schools in NIH funding per faculty member By most accounts CU has been under- performing in technology licensing

9. April 16, 2004 Our context The Fitz project is clearly a positive force in the biotech industry; nationally, in Colorado, a certainly at TTO. Our organization has had a less than optimal performance legacy but our team is equipped to rise to the challenge. President Hoffman’s support of our objectives and organization is a key to the sources of the life sciences industry in Colorado. Colorado has many of the ingredient’s for a successful biotech cluster, and technology transfer has frequently been cited as a catalyst or a rate limiting step, depending on perspective. We feel lifestyle choices, infrastructure, and a world class academic institution make our job as a catalyst ingredients for success.The Fitz project is clearly a positive force in the biotech industry; nationally, in Colorado, a certainly at TTO. Our organization has had a less than optimal performance legacy but our team is equipped to rise to the challenge. President Hoffman’s support of our objectives and organization is a key to the sources of the life sciences industry in Colorado. Colorado has many of the ingredient’s for a successful biotech cluster, and technology transfer has frequently been cited as a catalyst or a rate limiting step, depending on perspective. We feel lifestyle choices, infrastructure, and a world class academic institution make our job as a catalyst ingredients for success.

10. April 16, 2004 Hard Metrics Disclosure rates Patents issued Companies started Products launched Revenues generated Disclosures are the seeds of biotech innovation in Colorado, at CU and CSU Our patent portfolio does not reflect the full commercial and academic potential of our world-class faculty. Our charge is to extract this potential to its fullest extent. Products launched are a significant measure of our success. Not all University IP is directed to products, but products are a quality controlled manifestation of University innovation. Ultimately, our partnerships are all structured toward mutually beneficial revenue streams. This means jobs, investment in research, capital creation, tax base, and successful adoption of technology. This represents a multifactorial return to taxpayers on investment in academic research; this outcome represents the ultimate execution of our objectives.Disclosures are the seeds of biotech innovation in Colorado, at CU and CSU Our patent portfolio does not reflect the full commercial and academic potential of our world-class faculty. Our charge is to extract this potential to its fullest extent. Products launched are a significant measure of our success. Not all University IP is directed to products, but products are a quality controlled manifestation of University innovation. Ultimately, our partnerships are all structured toward mutually beneficial revenue streams. This means jobs, investment in research, capital creation, tax base, and successful adoption of technology. This represents a multifactorial return to taxpayers on investment in academic research; this outcome represents the ultimate execution of our objectives.

11. April 16, 2004 Hard Metrics

12. April 16, 2004 Target Metrics GROWTH Disclosures Patents Startups Revenues

13. April 16, 2004 Soft Metrics Sound portfolio Inventor sophistication Entrepreneurial potential Business relationships Jobs creation Economic impact Societal impact Our education and leadership responsibilities also include laying the groundwork for the objective we all strive to accomplish. The soft accomplishments lie both upstream and downstream of our hard metrics. They are addressed ion an ongoing basisOur education and leadership responsibilities also include laying the groundwork for the objective we all strive to accomplish. The soft accomplishments lie both upstream and downstream of our hard metrics. They are addressed ion an ongoing basis

14. April 16, 2004 Balancing the academic mission with the commercial objective Meeting our peer benchmarks Engendering the trust and participation of our faculty Adapting to swift and brutal changes in market forces and the business environment Bridging the “gap” Our challenges Our challenges are a product of our past and our future. We are subject to competing forces but have the planning and capibilities to move into the future. Commercial objective are generally reconcilable, with some compromises. That is an important recognition to move beyond out past and out peers. Our faculty have to believe this, from evidence and experience to achieve “critical mass”. Our staff must be able to work with faculty to identify trends, strategize, and react. They are. Gap funding is a key economic development issue, inside and outside of Universities. Balancing innovation, investment and risk has been a strength of the United States but we still have a long way to go. Policy, capital, coordination, and balance are all key elements of attenuating the impact of this problem. It may never be solved because it is all about tradeoffs.Our challenges are a product of our past and our future. We are subject to competing forces but have the planning and capibilities to move into the future. Commercial objective are generally reconcilable, with some compromises. That is an important recognition to move beyond out past and out peers. Our faculty have to believe this, from evidence and experience to achieve “critical mass”. Our staff must be able to work with faculty to identify trends, strategize, and react. They are. Gap funding is a key economic development issue, inside and outside of Universities. Balancing innovation, investment and risk has been a strength of the United States but we still have a long way to go. Policy, capital, coordination, and balance are all key elements of attenuating the impact of this problem. It may never be solved because it is all about tradeoffs.

15. April 16, 2004 Technology The ideal… The inventor has thought about a problem in the context of product development for a lucrative market Proof of concept work is done Infrastructure in place to exploit technology The commercial partner in is the queue

16. April 16, 2004 Technology The reality… Raw technologies Not directed to a market problem Product has not been defined or conceived Data directed at curiosity, publication, and next grant cycle Lack of infrastructure for revolutionary advances Teflon is an excellent case study in finding that problem and “pushing” technology into an unprimed market. It is not that bad, but the academic mission does affect the progression and direction of University innovation. Teflon is an excellent case study in finding that problem and “pushing” technology into an unprimed market. It is not that bad, but the academic mission does affect the progression and direction of University innovation.

17. April 16, 2004 Technology- the “gap” The risk gap- this is not venture capital SBIR/STTR CAPCO RAID and RAPID programs at NIH Some universities have gap funds There are a variety of pseudo gap funding mechanisms, all with a variety of shortcomings from a technologyy transfer perspectives: SBIR/STTR- not necessarily product or proof of concept oriented CAPCO- dead in Colorado, narrow eligibility RAID etc- late gap funding, after proof of principle but adds a lot of value Gap funds- limited in reach, sometimes dilutive, political So what do our technologies look like? There are a variety of pseudo gap funding mechanisms, all with a variety of shortcomings from a technologyy transfer perspectives: SBIR/STTR- not necessarily product or proof of concept oriented CAPCO- dead in Colorado, narrow eligibility RAID etc- late gap funding, after proof of principle but adds a lot of value Gap funds- limited in reach, sometimes dilutive, political So what do our technologies look like?

18. April 16, 2004 Licensing Product IP Typically exclusive, rarely a startup Platform IP Startup or existing company, sometimes divided uses Process IP Often nonexclusive to existing companies This is from a commercial perspective- really affects IP strategy, diligence strategy, marketing strategy. This early classification establishes downstream positioning and likely the lifecycle of a technologyThis is from a commercial perspective- really affects IP strategy, diligence strategy, marketing strategy. This early classification establishes downstream positioning and likely the lifecycle of a technology

19. April 16, 2004 Licensing Therapeutic compositions Typically exclusive, valuable but rare Drug delivery and formulation Startup or existing company, sometimes divided uses, often freedom to operate and other strategic issues Drug discovery and development Often nonexclusive to existing companies, rarely end up in a product Reagents Distribution licenses, rarely patented unless they have a product or proprietary gate element

20. April 16, 2004 Licensing Biomarkers and diagnostics Typically nonexclusive, most don’t have regulatory and clinical lab infrastructure in place Software Bioinformatics tools, usually code modules requiring interface, platform and recoding

21. April 16, 2004 Start Ups Ingredients for Success: Professional management Adequate capitalization Market scope Involved inventor- marquee name Technology- Platform or process IP Experienced, serial management, board, inventors, and investors Our startups consume precious resources so we seek true opportunities, usually similar to venture capital decision rules. It has to be investable, scalable, and not a science projectOur startups consume precious resources so we seek true opportunities, usually similar to venture capital decision rules. It has to be investable, scalable, and not a science project

22. April 16, 2004 Start UpsLiquidity events Amgen* (Kineret 2002 sales of $70 million, cofounded by CU researcher Dr. Marv Carruthers) Ribozyme (UCB; over $100 million, now Sirna; a Nobel prize) NexStar/Biostar (UCB; $550 million purchase by Gilead) Eyetech ($124 million) Myogen ($70 million IPO + 90 Million private; $350 million cap) Dharmacon ($80 million, private purchase)

23. April 16, 2004 Start UpsVenture funded companies Replidyne ($13 million) Globeimmune ($8 million) SomaLogic (UCB; $19.5 million) RxKinetix (>$3 million) Acceleration bioPharmaceuticals

24. April 16, 2004 Start UpsOn the radar screen… Newellink (Immunolgy and metabolism) Lohocla (Psychiatry biomarkers) ARCA discovery (Cardiac drugs) Sentry Biosciences (Cancer, apoptosis) Trasona (IV drugs for trauma and stress) Taligen (Complement mediated diseases) Barofold (Protein therapeutic processing) Activedry (Drug formulation and delivery) Hopefully these companies represent the next billion. The importance of our role in nurturing nascent technologies and placing them in in the marketplace is evident. Good results for an “underperforming: tech transfer operation. Certainly reflects the capabilities and accomplishments of the faculty. These were the low hanging fruit. Our charge is to enhance these accomplishments while harvesting the fruit on the margin. Hopefully these companies represent the next billion. The importance of our role in nurturing nascent technologies and placing them in in the marketplace is evident. Good results for an “underperforming: tech transfer operation. Certainly reflects the capabilities and accomplishments of the faculty. These were the low hanging fruit. Our charge is to enhance these accomplishments while harvesting the fruit on the margin.

25. April 16, 2004 Licensing and foundational roles Dr. Marv Carruthers DNA synthesis technologies Kineret- Dr. William Arend Clinical development and license collaborations Our relation ship with Amgen has been sustained and multidimensional. You could argue CU technology was a foundation in the biotech industry, certainly in the founding of the first and only fully integrated biotechnology Company. This was pre-Bayh-Dole Kineret was a first-of-class drug for the treatment of autoinflammatory diseases like rheumatoid arthritis. In a complicated chain of events, Kineret was a major factor in the multibillion dollar acquisition of Immunex by Amgen. We have licensed additional technologies to Amgen through the years. We have collaborated in clinical development of their pipeline.Our relation ship with Amgen has been sustained and multidimensional. You could argue CU technology was a foundation in the biotech industry, certainly in the founding of the first and only fully integrated biotechnology Company. This was pre-Bayh-Dole Kineret was a first-of-class drug for the treatment of autoinflammatory diseases like rheumatoid arthritis. In a complicated chain of events, Kineret was a major factor in the multibillion dollar acquisition of Immunex by Amgen. We have licensed additional technologies to Amgen through the years. We have collaborated in clinical development of their pipeline.

26. April 16, 2004 A model case: An entrepreneurial faculty group True synergies leveraging University assets on the cutting edge Strong inventors An evolving partnership Myogen is probably the most visible manifestation of successful CU technology. Their founders facilitated a synergistic relationship beyond the IP licensing level- They recruited good management, survived the downturn, maintained solvency in a capital desert, and sold the business model to the most pessimestic of investors. Importantly, they hav been a true partner of the University of Colorado throughout.Myogen is probably the most visible manifestation of successful CU technology. Their founders facilitated a synergistic relationship beyond the IP licensing level- They recruited good management, survived the downturn, maintained solvency in a capital desert, and sold the business model to the most pessimestic of investors. Importantly, they hav been a true partner of the University of Colorado throughout.

27. April 16, 2004 NeXstar SELEX* aptamer technology- implications in: Drug discovery (Gilead and Eyetech) Biosensors Diagnostics (Somalogic) Chromatography SELEX is one of the most far reaching CU technologies. A variety of companies have been touched and even made by SELEX. Eyetech has a drug for macular degeneration, that product is supporting their cap.SELEX is one of the most far reaching CU technologies. A variety of companies have been touched and even made by SELEX. Eyetech has a drug for macular degeneration, that product is supporting their cap.

28. April 16, 2004 Summary Our current system portfolio: Patents Issued 240 Patents in Prosecution: 151 Active Licenses/Options: 155 Viable Start-ups: 27

29. April 16, 2004 Questions?

30. April 16, 2004